Kpmg 2007 National Consumer Congress Mapping the future — Australia’s consumer demographics...

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2007 National Consumer Congress

Mapping the future — Australia’s consumer demographics

Bernard Salt

Author The Big Shift and The Big Picture

Partner KPMG Australia

14 March 2007

© 2007 KPMG, an Australian partnership, is part of the KPMG International network. KPMG International is a Swiss cooperative. All rights reserved.The KPMG logo and name are trademarks of KPMG.

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Push from the bush

• Suburban culture emerged during the 20th Century• Provincial coastal culture now ascendant • Underpinned by lifestyle-seeking baby boomers• Edna Everage; Neighbours 1985; Kath & Kim 2002

2001

Inner city5%

Suburbia59%

Rural17%

Coastal19%

1901

Inner city25%

Suburbia15%

Rural52%

Coastal8%


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1. Gold Coast 13,563

2. Wanneroo 7,941

3. Melton 6,814

4. Wyndham 6,660

5. Casey 6,429

6. Blacktown 4,955

7. Brisbane SW 4,839

8. Rockingham 4,616

9. Ipswich 4,240

10. Cairns 4,099

Population and business hotspots

Source: Australian Bureau of Statistics

Telecommuting lifestyle towns are evolving at Palm Beach (NSW), Mt Tambourine (Qld), Daylesford (Vic), Birdwood (SA), Falmouth (Tas) and Cundinup (WA) … and this was in 2001 prior to Broadband and 3G technology


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Why population shifts are important to business

10,000 extra residents support job growth, eg:

• 3,700 new suburban households, or

• 6,700 new inner-city households

• $82 million in new retail spending*

• $28 million in new supermarket spending*

• ½ a Kmart

• One cinema screen

• 7,500 cubic metres of pre mix concrete

Population loss reverses these markets*includes GST


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Our shifting heartland is changing the consumer focus

Areas of population loss and growth between 1976 and 2006 Losers

Winners

Narooma

Port Stephens

Port Macquarie

Coffs Harbour

Gold Coast

CaloundraNoosaHervey Bay

Yeppoon

Townsville

Port Douglas

MacedonRanges

Denmark

East Pilbara

Ngaanyatjarraku

Leonora

Broome

Palmerston

Busselton

Geraldton

Augusta-MargaretRiver Victor Harbor

Sorell

Proserpine


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Coastal towns require infrastructure and services

The driving force for many Australians is the pursuit of lifestyle either on the beach or up in the hills

Bun

bury

Her

vey

Bay

Man

dura

hB

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Cai

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Mac

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(Yep

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Bris

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Syd

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-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Po

pu

lati

on

ch

ang

e: 2

005-

to

200

6

Innisfail

BunburyHervey Bay

Mildura

Mandurah

National average


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Y/E January 2007 1997/07 2006/07

$b % change % change

Supermarkets, grocery & convenience stores 62.8 77% 7%

Take-away food retailing 9.4 36% 3%

Other food retailing 16.5 95% 11%

Total department stores 16.6 43% 3%

Clothing retailing 10.5 74% 4%

Other clothing related retailing 3.8 53% 5%

Furniture & floor covering retailing 7.7 120% 7%

Domestic hardware & houseware 9.5 123% 1%

Domestic appliances & recorded music 15.4 69% 9%

Newspapers, books & stationery retailing 5.3 38% -5%

Other recreational goods retailing 3.0 33% 7%

Pharmaceutical & cosmetic retailing 9.4 105% 10%

Other retailing 12.5 76% 4%

Hotels and licensed clubs 19.5 72% 4%

Cafes & restaurants 13.0 114% 13%

Selected services 2.8 63% 6%

Total retail & hospitality 218 74% 6%

Household formation, pharmacy and lifestyle drive consumer spending



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0 9010 20 30 40 50 60 70 80

Gen Y

Change in life expectancy over 80 years

Source: Australian Bureau of Statistics; Australia’s Health 2004 (AIHW)

Gen Y is stretching the teenage years

Child Adolescence Lifestyle OldRetired2008 82

Adult

Child Teen OldAdult1968 71

Child Adult Old1928 63


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Born 1976-1991 … now aged 16-31

Often a single child of baby boomer parents

Matured to adulthood in prosperous times

Many live at home with mum & dad

Not committed in their 20s … to marriage, mortgage, children, careers

May turn out to be the “Disappointed Generation”

Different views on loyalty to friends, to workmates, to employers

Prefer ‘deals’ not contracts and ‘mentors’ not bosses

Highly educated, opportunistic and global in their thinking

Characteristics of Generation Y


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50,000

150,000

There is a demographic logic behind the rise of Generation Y … in Australia …

1950 2050

Boomer Gen X Gen Y

2007

Net growth in working age population (15-64) over 100 yearsSource: KPMG Property Advisory (2007); Australian Historical Population Statistics, ABS (2004); Population Projections, Australia, 2004 to 2101 (2006)

0

50,000

100,000

150,000

200,000

250,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050


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… in Japan …

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

1950 2050

Boomer Gen X Gen Y

2007

Net growth in working age population (15-64) over 100 yearsSource: KPMG Property Advisory, Statistics Bureau of Japan (2006)


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… and in the US

Source: KPMG Property Advisory, US Census Bureau (2006)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

1950 2050

Boomer Gen X Gen Y

2007

Net growth in working age population (15-64) over 100 years

The “Latino Lift”


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What winning businesses must do

Offer careers within careers

Focus on work-life balance

Engage with staff

Create culture of positive relationships

Transmit consistent messages/values

In the early decades of the 21st Century, winning businesses will get their people strategy right


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The ageing of the average Aussie bride

Source: Australian Demographic Statistics; Marriages and Divorces

0

5

10

15

20

25

30

35

19

21

19

24

19

27

19

30

19

33

19

36

19

39

19

42

19

45

19

48

19

51

19

54

19

57

19

60

19

63

19

66

19

69

19

72

19

75

19

78

19

81

19

84

19

87

19

90

19

93

19

96

19

99

20

02

Bridegrooms

Baby boomer brides were 21 in 1971

Xer brides were 29 in 2002


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Behold the Great Australian Man Drought

Source: ABS 3201.0 (2004) Unpublished historical data (1976)1976 2006

10 20 30 40 50 60 70 80

Male surplus

30-39 1976 2006

Men 936,400 1,493,100

Women 882,200 1,502,300

Male surplus +54,200 -9,200

Male deficit

-20000

-15000

-10000

-5000

0

5000

10000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85


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YE June Men WomenMale Surplus

1968 137,000 136,000+1,000

1969 139,000 140,000-1,000

1970 144,000 145,000-1,000

1971 148,000 150,000-2,000

1972 154,000 157,000-3,000

1973 159,000 161,000-2,000

1974 149,000 151,000-2,000

1975 148,000 150,000-2,000

Women born in 1972 have got it toughest



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The fella filter

Total men aged 25-34 1,381,000

Less married 485,000

Total Prime Available Male Product 86,000

Less than 6 per cent of men survive the Fella Filter

Less gay relationship 7,000

Less men not earning $60k + pa (2005) 568,000

Less defacto 185,000

Less single parent (baggage) 12,000


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The fella filter delivers geeks and bean counters

1. Accountant 3,460

2. Sales & marketing manager 2,657

3. Software designer 2,233

4. Applications & analyst programmer 2,148

5. Fitter 1,593

6. General electrician 1,540

7. Systems designer 1,400

8. Management consultant 1,370

9. Solicitor 1,277

10. General manager 1,252


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Young Kiwi men are not in New Zealand

Source: Statistics New Zealand1976 2006

10 20 30 40 50 60 70 80

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84

30-39 1976 2006

Men 190,600 273,900

Women 186,000 304,200

Male surplus 4,500 -30,300

Male deficit

Male surplus


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Out with the Brady Bunch, in with Bridget Jones

• Mum, Dad & the Kids has been the leading social structure at the household level in Australia for several decades

• By 2021 ‘families’ and couples are eclipsed by singles – who then pull ahead in 2020s

1991 2001 2031

Singles 20 24 31

Couples 24 26 29

One-parent family 10 11 11

Mum, Dad & the Kids 41 33 24

Group households 5 4 3

Other family 1 1 1

Households (‘000s) 6,450 7,789 11,580


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0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2021 2031 2041 2051

Year

Po

pu

lati

on

Baby boomers just won’t die!

Source: ABS Censuses; ABS Series B Projections September 2003


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It doesn’t get any better after 43-48 …

40

5430

25

70

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,0001

5

18

21

24

27

30

33

36

39

42

45

48

51

54

57

60

63

66

69

72

75

78

81

84

87

90

93

96

99

0

50000

100000

150000

200000

250000

300000

350000

‘Rich’ live longer

Boomers at their peak until June 2006 … then the slide begins

Last 20 years Next 20 years


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… but discretionary spending peaks in the 50s

Source: KPMG Property Advisory Group; Australian Bureau of Statistics

Per

son

s p

er h

ou

seh

old

Income

Persons

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 8485

+

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Average rent/mortgage cost Average household income per person

Average household disposable income Persons per household

Rent

Disposable


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Big shift in attitudes to retirement next decade

60,000

140,000

1950 20502007

Source: KPMG Property Advisory (2007); Australian Historical Population Statistics, ABS (2004); Population Projections, Australia, 2004 to 2101 (2006)


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Generational traits

• Born 1946-1961

• Now aged 46-61

• 4.1 million

• Idealistic; career-orientated; consumerist

• Promoted ‘young’ and propped

• Peak income earning 1991-2005

• Succession planning, advisory boards, non-executive directors

• Inter-generational fight

Boomers

• Born 1961-1976

• Now aged 31-46

• 4.4 million

• Realists; cynical

• Held back by “old fart log-jam”


• Assuming positions of high office now

• Must deal with baby boomers in retirement

Gen X

• Born 1976-1991

• Now aged 16-31

• 4.6 million (ultimately)

• Experiential; ethicists; uncommitted to career; relationships

• Extended adolescence

• Helicopter kids; kippers


• Technology savvy; global thinking

• Inherit boomer wealth

Gen Y


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Further information & contact

• The Big Picture – $29.95rrp out now

• Bernard Salt’s column appears in The Australian every Thursday

• Bernard Salt’s columns appear monthly in Wish Magazine

• Population Growth Database 2006 now available at $495: contact [email protected]

• Contact: Bernard Salt (03) 9288 5047; [email protected]; www.bernardsalt.com.au

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Kpmg 2007 National Consumer Congress Mapping the future — Australia’s consumer demographics...

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